Every second youth jobless, economy in serious crisis: Chidambaram

A day before the crucial Union Budget session, former finance minister P. Chidambaram delivered a scathing critique of the Modi government’s economic policies, unveiling a damning report titled The Real State of the Economy 2025.

Addressing the media, Chidambaram painted a grim picture of India’s economic trajectory, warning of rising unemployment, stagnating wages and deepening inequality.

"The Indian economy is facing significant challenges," Chidambaram asserted. "The high unemployment rates among youth and graduates are alarming, with nearly 40 per cent and 30 per cent respectively. Every second young person is jobless. Stagnant wages, coupled with soaring inflation in essential sectors like food, healthcare and education, have made survival difficult for millions. The rich–poor divide is expanding at an unprecedented pace."

According to the report, inflation in food prices has averaged 6.18 per cent from 2012 to 2024, while healthcare costs have surged at an alarming annual rate of 14 per cent. Education inflation, another key concern, has been rising at around 11 per cent per year.

The data from the Centre for Monitoring Indian Economy (CMIE) further underscores the crisis, revealing an all-India unemployment rate of 8.1 per cent in December 2024, with even grimmer numbers when broken down by age, education and gender.

Chidambaram pointed out that while the government celebrates headline GDP growth numbers, they fail to translate into better livelihoods for ordinary citizens. The report highlights that 70 per cent of the population survives on a meagre Rs 100–150 per day, a stark contrast to the ballooning wealth of the top 1 per cent.

Rajeev Gowda, chairperson of the AICC research department, further broke down the report’s findings, listing key indicators of economic distress: an unemployment crisis, uninspiring and unequal GDP growth, stagnant incomes, low household consumption, declining savings and a struggling manufacturing sector.

He also pointed to faltering trade and investment, contradicting the government's claims of economic stability.

The report paints a grim picture of stagnating wages, especially in the informal sector, which employs a significant portion of the workforce.

Construction workers, for instance, have seen minimal wage growth, with male labourers' daily wages increasing from Rs 176 to just Rs 205. Female workers fare even worse, earning Rs 45 less per day compared to their male counterparts. These wages, Chidambaram noted, reflect the harsh reality of millions struggling to make ends meet.

A key point raised by Chidambaram was the government’s apparent refusal to acknowledge these harsh economic realities. "Many of these facts are conveniently buried or outright ignored by the Union government. The mainstream media rarely gets the opportunity to expose the truth," he said.

As the Budget session begins, the Modi government is expected to counter these claims with its usual rhetoric of ‘Viksit Bharat’ and ‘economic resilience’.

However, with worsening joblessness, declining purchasing power and deepening inequality, the Opposition's revelations should ignite fierce debate.